Should You Avoid Paypal Holdings Inc (NASDAQ:PYPL)?

Paypal Holdings Inc. (NASDAQ:PYPL) posted net revenues of $9.25 billion for 2015, which increased $1.22 billion or 15% year-over-year. The increase was mainly attributable to a higher total payment volume (TPV), which reached a growth rate of 20% in 2015. At the same time, the 20% growth in TPV was driven by growth in active accounts, increased number of payment transactions, and growth from the company’s Braintree and Venmo products. Paypal’s Venmo app is a mobile application that enables users to move money using their mobile devices. Just recently, several analysts expressed their views that market participants are underestimating the full potential of this peer-to-peer payment app, saying that investors’ worries about toughening competition from Apple Inc. (NASDAQ:AAPL)’s Apple Pay are overstated. Jefferies analyst, Jason Kupferberg, recently asserted that Paypal’s mobile revenue growth has accelerated since Apple launched its payments app and said that this app could lead to 2.1%-to-5.5% earning per share accretion for 2017 and 3.0%-to-6.7% in 2018.

Hedge fund activity in Paypal Holdings Inc. (NASDAQ:PYPL)

At the end of the fourth quarter, a total of 84 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 3% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Carl Icahn’s Icahn Capital LP has the biggest position in Paypal Holdings Inc. (NASDAQ:PYPL), worth close to $1.68 billion, comprising 5.7% of its total 13F portfolio. On Icahn Capital LP’s heels is Orbis Investment Management, led by William B. Gray, holding a $443.9 million position; 3.5% of its 13F portfolio is allocated to the stock. The remaining members of the smart money that hold long positions include D. E. Shaw’s D E Shaw, Seth Klarman’s Baupost Group and Kerr Neilson’s Platinum Asset Management.